Between 62 and 73, a Retiree With $400,000 in an IRA Can Convert About $35,000 a Year at 12%. Most Convert Nothing, Then Pay 22% on All of It at 73.

The stretch between stepping away from work and taking required minimum distributions (RMDs) is the most valuable tax-planning window most retirees ever get. SECURE 2.0 pushed the statutory RMD age to 75 for workers born in 1960 or later, though many savers target age 73 as their operational finish line to align with Medicare transitions and Social Security claiming. Wages have stopped, benefits are often deferred to compound at 8% a year, and mandatory withdrawals have not yet begun. That temporary drop in taxable income creates a runway to execute Roth conversions at bargain rates before the IRS forces the money out.

This gap represents the lowest taxable baseline most adults will ever experience. It creates an ideal opening for a Roth conversion: moving money from a traditional IRA into a Roth while ordinary income rates sit at their lowest point. With no wages and no mandatory distributions yet filling the brackets, every transferred dollar gets locked in at the lowest available marginal rate.

How the 12% Bracket Math Works in 2026

For a single filer in 2026, the IRS set the standard deduction at $16,100, the 12% bracket applies to income over $12,400, and the 22% bracket begins above $50,400 of taxable income, according to IRS Revenue Procedure 2025-32. For married couples filing jointly, the standard deduction is $32,200, the 12% bracket starts above $24,800, and the 22% bracket begins above $100,800.

One additional wrinkle worth noting: the One Big Beautiful Budget Act (OBBBA) created a temporary $6,000 senior bonus deduction for single filers age 65 and older (double for joint filers) that runs from 2025 through 2028, though it phases out starting at $75,000 of MAGI for single filers. For retirees whose income stays low during the gap years, this deduction can modestly widen the conversion headroom before the 22% bracket is reached.

Filling the 12% bracket means converting just enough each year to bring taxable income to the top of that threshold without crossing into the 22% bracket. For a single retiree living on a modest baseline of outside cash or taxable dividends, that math leaves roughly $35,000 a year in conversion headroom, calculated as the $50,400 bracket ceiling minus the taxable baseline income. Systematic annual transfers of about $35,000 across the gap window steadily migrate a $400,000 traditional balance into a tax-free Roth, locking in a known 12% rate on money that would otherwise face higher rates later.

Cost of Wasting the Window

Retirees who convert nothing during this window leave that $400,000 compounding untouched inside a tax-deferred wrapper. Assuming a modest 6% average annual return, an untouched $400,000 balance roughly doubles by age 75, and at that point the IRS Uniform Lifetime Table divisor of 24.6 drives a first-year mandatory RMD of more than $32,000. Stacked on top of $30,000 or more in annual Social Security benefits, those forced distributions push taxable income past the 12% threshold, subjecting the bulk of future withdrawals to the 22% bracket for the rest of retirement. You can size up that stretch between the last paycheck and the first RMD in a free Roth conversion guide.

Second-Order Effects Worth Naming

Roth conversions carry side effects that deserve a direct look. A conversion raises modified adjusted gross income (MAGI), which is the figure Medicare uses to set premium surcharges. That can trigger IRMAA, the income-related monthly adjustment amount, which raises Medicare Part B and Part D premiums two years after the conversion year. In 2026, the IRMAA surcharge kicks in at $109,000 of MAGI for single filers and $218,000 for joint filers, adding at least $81.20 per month to the Part B premium in the first surcharge tier alone. Because Medicare uses income from two years prior, a large conversion in 2026 can show up as a surprise premium hike in 2028.

Conversions can also increase the taxable portion of Social Security benefits, since the formula that determines how much of the benefit is taxed is itself based on combined income. And the tax owed on the conversion is best paid from a taxable brokerage account rather than from the converted amount itself. Paying from inside the IRA shrinks the resulting Roth balance, and if the retiree is under 59.5, it can trigger a penalty on the portion used for taxes.

The 2027 Social Security COLA was officially set at 3.6% by the Social Security Administration on October 14, 2026, the largest increase since 2023. For retirees already claiming, that bump nudges benefit income higher and shrinks the room remaining in the 12% bracket for conversions. It is one more reason why the early gap years, before benefits are claimed, tend to be the most cost-effective.

Summary of the Gap-Year Window

The gap window runs longer than most retirees expect, especially for anyone born in 1960 or later who faces an RMD age of 75 rather than 73. The 12% bracket in 2026 is defined by confirmed IRS figures, and the second-order effects from IRMAA and Social Security taxation are real but manageable when the annual conversion is sized to the bracket rather than the full balance. Every dollar left unconverted during the window will eventually be taxed later, on a larger balance, at a higher rate.

Editor’s note: This update corrects the 2027 Social Security COLA figure from an earlier estimate of 3.1% to the official SSA-announced rate of 3.6%, adds the specific 2026 IRMAA income threshold ($109,000 for single filers) and the Medicare two-year lookback mechanic, introduces context on the OBBBA senior bonus deduction that may widen conversion headroom for some retirees, and incorporates the IRS Uniform Lifetime Table divisor at age 75 to make the RMD projection more precise.

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